Indonesia — Southeast Asia’s largest economy — is at a crucial juncture in its energy transition, balancing significant renewable potential with persistent structural and market challenges. The Asia Pacific Renewable Energy outlook highlights both the promise and the obstacles ahead as the country seeks to reduce reliance on fossil fuels and achieve net-zero emissions by 2060.

Key Insights

1. Strong Policy Goals, Slow Implementation
Indonesia has set ambitious targets — including achieving 23 % of its energy mix from renewables by 2025 — but is likely to fall short due to entrenched coal use and regulatory complexities.

2. Coal Still Dominates
Abundant domestic coal keeps fossil fuels economically attractive, delaying large-scale adoption of clean energy. However, initiatives like the Asian Development Bank’s Energy Transition Mechanism and multilateral financing partnerships aim to accelerate coal retirement.

3. Growth Potential in Solar & Geothermal
Indonesia’s solar sector — especially rooftop and floating solar — presents strong growth prospects, with rooftop capacity expected to expand significantly by 2030. The country also holds the world’s largest geothermal reserves, though high costs and long development timelines remain challenges.

4. Investment & Local Partnerships Are Critical
Developers must navigate local content requirements and partner with Indonesian firms to succeed. Renewable projects require broader financing strategies, expertise in offtake agreements, and deep local engagement.

Indonesia’s renewable transition reflects wider regional trends: strong renewable resource potential but a need for clearer policies, financing and infrastructure to unlock investment. For example, recent energy plans aim to expand renewable usage significantly over the next decade, aligning with broader APAC ambitions for greener grids.

CzechTrade Perspective

From a CzechTrade standpoint, Indonesia’s renewable energy landscape offers several strategic avenues for Czech investors and exporters. while Indonesia’s renewable transition faces policy and market hurdles, strategic engagement by Czech enterprises — especially those offering advanced renewable technologies and partnership models — can play a meaningful role in the archipelago’s energy transformation.

Source: www,jakartapost.com

Zpracoval kolektiv pracovníků zahraniční kanceláře Czechtrade Indonésie.